SOUTH RIVER BOROUGH BOARD OF EDUCATION AUDITOR'S ... · Net Cash Resource Schedule ..... 19 Audit...

SOUTH RIVER BOROUGH BOARD OF EDUCATION

AUDITOR'S MANAGEMENT REPORT ON

ADMINISTRATIVE FINDINGS -

FINANCIAL, COMPLIANCE AND PERFORMANCE

FISCAL YEAR ENDED JUNE 30, 2018

Prepared by

Gerard Stankiewicz, CPA, PSA

of the Firm SAMUEL KLEIN AND COMPANY 36 West Main Street, Suite 303

Freehold, NJ 07728

TABLE OF CONTENTS

Report of Independent Auditors .................................................................................................. 1 Scope of Audit ............................................................................................................................ 2 Administrative Practices and Procedures:

Insurance .............................................................................................................................. 2 Officials' Bonds ..................................................................................................................... 2

Financial Planning, Accounting and Reporting: Examination of Claims .......................................................................................................... 2 Payroll Account. .................................................................................................................... 3 Unemployment Compensation Insurance Trust Fund ........................................................... 3 Reserve for Encumbrances and Accounts Payable .............................................................. 3 Classification of Expenditures ............................................................................................... 3 Travel Expenditures .............................................................................................................. 4 Student Body Activities Funds .............................................................................................. 4 Board Secretary/School Business Administrator's Records .................................................. 4 Treasurer's Records ............................................................................................................. 4 Elementary and Secondary Education Act of 1965 (E.S.E.A.) as Reauthorized

by Every Students Succeeds Act ........................................................................................ 5 Other Special Federal and/or State Projects ......................................................................... 5 T.P.A.F. Reimbursement ...................................................................................................... 5 Expendable and Nonexpendable Trust Fund ........................................................................ 5

School Purchasing Programs: Contracts and Agreements Requiring Advertisement for Bids ............................................ 5-6

School Food Service ............................................................................................................... 7-8 Testing for Lead of All Drinking Water in Educational Facilities .................................................. 8 Application for State School Aid .................................................................................................. 8 Pupil Transportation ................................................................................................................... 8 Recommendations ...................................................................................................................... 9 Follow-up on Prior Year's Findings ............................................................................................. 9 Acknowledgment ........................................................................................................................ 9 Schedule of Meal Count Activity ............................................................................................... 10 Schedule of Audited Enrollments ......................................................................................... 11-15 Excess Surplus Calculation ................................................................................................. 16-18 Net Cash Resource Schedule .................................................................................................. 19 Audit Recommendations Summary .......................................................................................... 20

SAMUEL KLEIN AND COMPANY CERTIFIED PUBLIC ACCOUNTANTS

550 BROAD STREET, 11 TH FI"OOR

NEW.A.HK, NJ 07102-99(39

PHONE (973) G24-G100

FAX (97:3) G24·El101

36 WEST MAIN STHEET, SUITE 303

FHEEHOLD, NJ 07728-2291

PHONE (732) 780-2600

FAX (732) 780-1030

REPORT OF INDEPENDENT AUDITORS

Honorable President and Members of the Board of Education

Borough of South River Board of Education

County of Middlesex, New Jersey

We have audited, in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards issued by the Comptroller General of the United States, the basic financial statements of the Board of Education of the Borough of South River School District in the County of Middlesex for the year ended June 30, 2018, and have issued our report thereon dated February 11, 2019.

As part of our audit, we performed procedures required by the New Jersey Department of Education, and the findings and results thereof are disclosed on the following pages, as listed in the accompanying table of contents.

This report is intended solely for the information of the Borough of South River Board of Education's management and the New Jersey Department of Education. However, this report is a matter of public record and its distribution is not limited.

Freehold, New Jersey February 11, 2019

Gerard Stankiewicz Certified Public Accountant Licensed Public School Accountant #912

SAMUEL KLEIN AND COMPANY

MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

www.samuelklein-cpa-rma.com

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Scope of Audit

ADMINISTRATIVE FINDINGS - FINANCIAL COMPLIANCE AND PERFORMANCE

JUNE 30, 2018

The audit covered the financial transactions of the Board Secretary/School Business Administrator and the Treasurer of School Monies, the activities of the Board of Education and the records of the various funds under the auspices of the Board of Education. This report is filed in conjunction with the District's Comprehensive Annual Financial Report (CAFR).

Administrative Practices and Procedures

Insurance

Fire insurance coverage was carried in the amounts as detailed on the Insurance Schedule contained in the Statistical Tables (Section) - Exhibit J-20, of the District's CAFR.

Officials' Bonds

Kenneth J. Kokoszka

Joseph Zanga

(A) Western Surety Company.

Position

Board Secretary/School Business Administrator

Treasurer of School Monies

Amount

$ 25,000.00 (A)

$ 236,592.00 (A)

There is a Public Employees Faithful Performance Blanket Position Bond.

Financial Planning, Accounting and Reporting

Examination of Claims

An examination of claims paid during the period under audit was made as to affidavit or signed declaration, proper itemization and proper authorization by officials. The Board's voucher system is in accordance with RS. 18:6-34, which requires a signed declaration by the vendor in place of an affidavit. In addition, all vouchers are signed by the Board Secretary. The actual signature for receipt of goods or services rendered is on the receiving copy of the purchase order set, which is attached to the purchase order filed by appropriation number. All claims approved for payment are listed by fund total in the Minutes.

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ADMINISTRATIVE FINDINGS - FINANCIAL COMPLIANCE AND PERFORMANCE (CONTINUED)

JUNE 30, 2018

Financial Planning, Accounting and Reporting (Continued)

Payroll Account

The net salaries of all employees of the Board were deposited in the Payroll Account. Employees' payroll deductions and employer's share of fringe benefits were deposited in the Payroll Agency Account.

All payrolls were approved by the Superintendent and were certified by the President of the Board and the Board Secretary/School Business Administrator.

Compensation records were tested, and for those individuals examined; it was determined that salaries paid were in accordance with the amounts authorized by the Board.

Salary withholdings were promptly remitted to the proper agencies, including required health insurance withholdings.

The Board utilizes a payroll service bureau for all of its payroll transactions, inclusive of the net pay and the payroll agency (withholdings) fund. The payroll service bureau has provided the required report on their internal controls on Internal Control of Service Organizations in accordance with the AICPA Statement on Standards for Attesting Engagements Number 16 (SSAE#16).

Unemployment Compensation Insurance Trust Fund

The Board has adopted the direct reimbursement method and has established an Unemployment Compensation Insurance Trust Fund.

Reserve for Encumbrances and Accounts Payable

A review of outstanding issued purchase orders was made as of June 30, 2018 for goods not yet received or services not yet rendered and it was determined that no blanket purchase orders existed for proper classification of orders as reserved for encumbrances and accounts payable.

Classification of Expenditures

The coding of expenditures was tested for proper classification in accordance with N.J.A.C. 6A:23-2.2(g) as part of our test of transactions of randomly selected expenditure items. We also examined the coding of all expenditures included in our compliance and single audit testing procedures. In addition to randomly selecting a test sample, our sample selection specifically targeted administrative coding classifications to determine overall reliability and compliance with N.J.A. C. 6A:23A-2.4. As a result of the procedures performed, no transaction error rate was noted and no additional procedures were deemed necessary to test the propriety of expenditure classification.

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JUNE 30, 2018


Travel Expenditures

Travel expenditures were tested and found to be in compliance with N.J.A.C. 6A:23A-7.1.

Student Body Activities Funds

High School and Middle School

Cash receipts and cash disbursements records were maintained in satisfactory condition.

All receipts were promptly deposited in the bank.

A test check of bills and invoices was made to the cash disbursements record, no exceptions were noted.

Board Secretary/School Business Administrator's Records

Our review of the financial and accounting records maintained by the Board Secretary revealed that the records were maintained properly.

Acknowledgment of the Board's receipt of the Board Secretary's report was included in the minutes.

Treasurer's Records

The Treasurer's records were found to be maintained properly.

Acknowledgment of the Board's receipt of the Treasurer's report was included in the minutes.

-4-


JUNE 30, 2018


Elementary and Secondary Education Act of 1965 (E.S.E.A.) as Amended by Every Student Succeeds Act (E.S.E.A.)

The NCLB financial exhibits are contained within the Special Revenue Section of the CAFR. This section of the CAFR documents the financial position pertaining to the project under Title I, II and Ill of the Elementary and Secondary Education Act.

The study of compliance for ESEA indicated no matters of noncompliance and/or questioned costs.

Other Special Federal and/or State Projects

The District's Special Projects were approved as listed on the Schedules of Federal and State Financial Assistance located in the CAFR.

Our audit of the federal and state funds on a test basis indicated that obligations and expenditures were incurred during the fiscal year or project period for which the project was approved.

The financial exhibits are contained within the Special Revenue Section of the CAFR. This section of the CAFR documents the financial position pertaining to the aforementioned special projects.

T.P.A.F. Reimbursement

Our Audit procedures included a test of the semi-monthly reimbursement forms filed with the Department of Education for District employees who are members of the Teachers Pension and Annuity Fund. No exceptions were noted.

Expendable and Nonexpendable Trust Fund

The accounts within this fund appear to have been properly administered.

School Purchasing Programs

Contracts and Agreements Requiring Advertisement for Bids

Effective July 1, 2015 and thereafter the bid thresholds in accordance with N.J.S.A. 18A:18A-3 and 18A:39-3 are $29,000 and $18,200, respectively. The bid threshold was increased as allowable by statute to $40,000 by resolution of the Board of Education, as the District has a qualified purchasing agent (QPA).

- 5 -


JUNE 30, 2018

School Purchasing Programs (Continued)

Contracts and Agreements Requiring Advertisement for Bids (Continued)

The board of education has the responsibility of determining whether the expenditures in any category will exceed the statutory thresholds within the fiscal year. Where question arises as to whether any contract or agreement might result in violation of the statute, the Attorney's opinion should be sought before a commitment is made.

Resolutions were adopted authorizing the awarding of contracts or agreements for "Professional Services" per N.J.S.A. 18A:18A-5.

Inasmuch as the system of records did not provide for an accumulation of payments for categories for the performance of any work or the furnishing or hiring of any materials or supplies, the results of such an accumulation could not reasonably be ascertained. Disbursements were reviewed, however, to determine whether any clear-cut violations existed.

The results of our examination indicated that no individual payments, contracts or agreements were made "for the performance of any work or the furnishing or hiring of any materials of supplies," in excess of the statutory thresholds where there had been no advertising for bids in accordance with the provision of N.J.S.A. 18A:18A-4.

Resolutions were adopted authorizing the awarding of contracts or agreements for "Professional Services" per N.J.S.A. 18A:18A-5.

The minutes indicate that bids were advertised for the following:

High School Sidewalk Replacement Copier Paper School Supplies

HVAC & Tracer System Maintenance Substitute Nurses Services Technology Consultant Services

The system of records did not provide for an accumulation of purchases for which the school board used contracts entered into by the State Department of Purchase and Property pursuant to Ch. 114, P.L. 1977, therefore, the extent of such purchases could not reasonably be ascertained. Our examination did reveal however, that the following purchases were made through the use of State contracts.

Computer Equipment Copier Equipment Custodial Supplies

- 6 -

School Supplies Technology Equipment


JUNE 30, 2018

School Food Service

The financial transactions and statistical records of the school food services were maintained in satisfactory condition. The financial accounts, meal count record and eligibility applications were reviewed on a test-check basis. No exceptions were noted.

Applications for free and reduced price meals were reviewed for completeness and accuracy. The number of free and reduced price meals claimed as served did not exceed the number of valid applications on file, times the number of operating days, on a school by school basis. The free and reduced price meals and free milk policy is uniformly administered throughout the School System. The required verification procedures for free and reduced price applications were completed and available for review. No exceptions were noted.

The Board employs Chartwells, a management company ("the Management Company"), to handle their food service program. We examined, on a test basis, their expenditures for separate recording of food, labor and other costs. Vendor invoices were reviewed and costs verified. Inventory records on food and supply items were currently maintained and properly applied in determining the cost of food and supplies used. Provisions of the management company contract were reviewed and audited. All vendor discounts, rebates and credits vendors and/or the Management Company were tracked and credited to the Food Service Account and reconciled to supporting documentation at least annually.

All employees of the Cafeteria are hired and paid by the Management Company.

Exhibits reflecting child nutrition program operations are included in Section B (4, 5 & 6) of the CAFR.

The food service company has provided the required study of their internal controls in accordance with the Report on Internal Control of Service Organizations in accordance with the AICPA Statement on Standards for Attesting Engagements Number 16 (SSAE#16).

The District is depositing and expending program monies in accordance with N.J.S.A. 18A:17-34 and 19-1 through 19-4.1. The appropriate revenue and expenditure records were maintained in order to substantiate the non-profit status of the school food service.

Net cash resources did not exceed three months average expenditures.

Food Distribution Program commodities were received during the period of audit. Inventory records on commodities are being maintained. The value of U.S.D.A. Commodities received during 2017-2018 was $85,298.90.

-7-


JUNE 30, 2018

School Food Service (Continued)

USDA Food Distribution Program (food and/or commodities) were received and a single inventory was maintained on a first-in first-out basis. No exceptions were noted.

The school district project remains the detailed revenue and expenditure information necessary in order to execute the USDA mandated Non-Program Food Revenue Tool at least annually.

Testing for Lead of All Drinking Water in Educational Facilities

The school district adhered to all the requirements of N.J.A.C. 26-1.2 and 12.4 related to the testing for lead of all drinking water in educational facilities.

Application for State School Aid

Our audit procedures included a test of information reported in the October 13, 2017 Application for State School Aid (ASSA) for on-roll, private schools for the handicapped, low-income and bilingual. We also performed a review of the district procedures related to its completion. The information on the ASSA was compared to the district workpapers. The results of our procedures are presented in the Schedule of Audited Enrollments.

The district maintained workpapers on the prescribed state forms or their equivalent.

The district has written procedures for the recording of student enrollment data.

Pupil Transportation

Our audit procedures included a test of on-roll status reported in the 2017-2018 District Report of Transported Resident Students (DRTRS). The information that was included on the DRTRS was verified to the DRTRS Eligibility Summary. The results of our procedures are presented in the Schedule of Audited Enrollments.

Our procedures also included a review of transportation related contracts and purchases. Based on our review, the district complied with proper bidding procedures and award of contracts. No exceptions were noted in our review of transportation related purchases of goods and services.

- 8 -

None.

RECOMMENDATIONS JUNE 30, 2018

FOLLOW-UP ON PRIOR YEAR'S FINDINGS

There were no prior year recommendations.

ACKNOWLEDGMENT

We received the complete cooperation of all the officials of the School District and we greatly appreciate the courtesies extended to us.

Respectfully submitted,

~f.1/ ~· •• ~· ~. i1 ./, ''· ./ . / """-.,,.,,,_. ~ '

Gerard Stankiewicz Certified Public Accountant Public School Accountant #912

For The Firm SAMUEL KLEIN AND COMPANY

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Program

National School Lunch (Regular Rate)

School Breakfast (Regular Rate)

School Breakfast (Severe Need Rate)

School Milk

BOARD OF EDUCATION SOUTH RIVER BOROUGH, COUNTY OF MIDDLESEX

SCHEDULE OF MEAL COUNT ACTIVITY NUMBER OF MEALS SERVED AND (OVERl/UNDERCLAIM

ENTERPRISE FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2018

Meal Meals Meals Meals Catego!}'. Claimed Tested Verified Difference

Paid 78,709 78,709 78,709 Reduced 14, 199 14, 199 14,199

Free 107,550 107,550 107,550

Total 200,458 200,458 200,458

Paid Reduced

Free

Total

Paid 23,983 23,983 23,983 Reduced 5,912 5,912 5,912

Free 60,441 60,441 60,441

Total 90,336 90,336 90,336

Paid Free

Total

- 10 -

Over (Under)-

Rate Claim

.31/.05 2.83/.055 3.23/.055

0.3 1.79 2.09

~heet 1 of 5

BOARD OF EDUCATION BOROUGH OF SOUTH RIVER SCHOOL DISTRICT

COUNTY OF MIDDLESEX SCHEDULE OF AUDITED ENROLLMENTS

APPLICATION FOR STATE SCHOOL AID SUMMARY ENROLLMENT AS OF OCTOBER 13, 2017

Aeelication for State School Aid Samele for Verification Reported on Report on Sample Verified per Errors per

A.S.S.A. Work papers Selected from Registers Registers On Roll On Roll Errors Workeaeers On Roll On Roll

Full Shared Full Shared Full Shared Full Shared Full Shared Full Shared

Half Day Preschool (3 yrs old) 6 6 1 1 Half Day Preschool (4 yrs old) 14 14 2 2 Full Day Kindergarten 140 140 18 18 One 138 138 18 18 Two 152 152 20 20 Three 135 135 18 18 Four 157 157 20 20 Five 129 129 18 18

..... Six 141 141 18 18

..... Seven 156 156 21 21 Eight 149 149 20 20 Nine 146 146 20 20 Ten 144 144 20 20 Eleven 146 146 19 19 Twelve 122 122 16 16 --- --- ---

Subtotal ~ ~ 249 249 ---Special Ed - Elementary 139 139 17 17 Special Ed - Middle School 88 88 11 11 Special Ed - High School ~ 79 10 10

Subtotal 306 __1Q§_ 38 38

Home Instruction

Totals 2,181 2,181 287 287 = = = = --- = = Percentage Error 0.00% 0.00% 0.00% 0.00%

= = =

Sheet 2 of 5



APPLICATION FOR STATE SCHOOL AID SUMMARY (CONTINUED} ENROLLMENT AS OF OCTOBER 13, 2017

Low Income Sample for Verification Reported on Report on AS.SA Workpapers Sample Verified to at Low as Low Selected from Application Sample

Income Income Errors Workpapers and Register Errors FREE LUNCH

Half Day Preschool Full Day Preschool Full Day Kindergarten 67 67 67 67 One 76 76 76 76 Two 89 89 89 89 Three 69 69 69 69 Four 73 73 73 73 Five 62 62 62 62

~ Six 72 72 72 72

l'V Seven 73 73 73 73 Eight 72 72 72 72 Nine 64 64 64 64 Ten 52 52 52 52 Eleven 51 51 51 51 Twelve 47 47 47 47

Subtotal 867 867 867 867

Special Ed - Elementary 77 77 77 77 Special Ed - Middle School 53.5 53.5 53.5 53.5 Special Ed - High School 40 40 40 40

Subtotal 170.5 170.5 170.5 170.5

Juvenile Detention Center

Totals 1,038.5 1,038.5 1,038.5 1,038.5

Percentage Error 0.00% 0.00%

§.heet 3 of 5



APPLICATION FOR STATE SCHOOL AID SUMMARY {CONTINUED) ENROLLMENT AS OF OCTOBER 13, 2017

Resident LEP Low Income Sample for Verification Reported on Reported on

A.S.S.A. Workpapers Sample Verified to as NOT Low as NOT Low Selected from Application Sample

Income Income Errors Workpapers and Register Errors

Full Day Kindergarten 23 23 23 23 One 25 25 25 25 Two 26 26 26 26 Three 13 13 13 13 Four 10 10 10 10 Five 9 9 9 9 ...... Six 3 3 3 3 w Seven 5 5 5 5 Eight 12 12 12 12 Nine 16 16 16 16 Ten 3 3 3 3 Eleven 6 6 6 6 Twelve 2 2 2 2

Subtotal 153 153 153 153

Special Ed - Elementary 12 12 12 12 Special Ed - Middle School 2.0 2.0 2 2 Special Ed - High School 2 2 2 2

Subtotal 16 16 16 16

Home Instruction

Totals 169 169 169 169

Percentage Error 0.00% 0.00%

Full Day Kindergarten One Two Three Four ..... Five .J:>,. Six Seven Eight Nine Ten Eleven Twelve

Subtotal

Special Ed - Elementary Special Ed - Middle School Special Ed - High School

Subtotal

Home Instruction

Totals

Percentage Error



APPLICATION FOR STATE SCHOOL AID SUMMARY (CONTINUED) ENROLLMENT AS OF OCTOBER 13, 2017

Resident NOT LEP Low Income Reported on Reported on

A.S.S.A Workpapers Sample as Low as Low Selected from Income Income Errors Workpapers

8 8 8 7 7 7 6 6 6 8 8 8 9 9 9 6 6 6 1 1 1 4 4 4 1 1 1 2 2 2 3 3 3 3 3 3 1 1 1

59 59 59

4 4 4

4 4 4

63 63 63

0.00%

Sheet4 of 5

Sample for Verification

Verified to Application Sample

and Register Errors

8 7 6 8 9 6 1 4 1 2 3 3 1

59

4

4

63

0.00%

..... CJ1



APPLICATION FOR STATE SCHOOL AID SUMMARY (CONTINUED) ENROLLMENT AS OF OCTOBER 13, 2017

Students - Grade PK Reg. - Public Schools Vocational School Students Transported Nonpublic School Students Non Public School Students AIL Non Public School Students AIL Charter School Students Special. Ed Public School Students

Total Students

Public School w/ Special Needs Private School Handicap- Spec. Needs

Total Students

Out of District Public School Students Out of District Private School Handicap

Total Students

Courtesy Students

Totals

Percentage Error

Average mileage, excluding grade PK students Average mileage - regular, including grade PK students Average mileage - special education/special needs

Reported on DRTRS by

DOE

31 36

42 90 88

29.5 316.5

74.5 7

82

24 2

26

14

438

Transportation

Reported on DRTRS by

District

31 36

42 90 88

29.5 316.5

74.5 7

82

24 2

26

14

438

ReQQ..rted

5.0 5.0 4.7

Sheet 5 of 5

Errors

0.00%

Recalculated bvDOE

5.0 5.0 4.7


COUNTY OF MIDDLESEX FISCAL YEAR ENDED JUNE 30, 2018

(UNAUDITED)

EXCESS SURPLUS CALCULATION REGULAR DISTRICT

SECTION 1

A. 2% Calculation of Excess Surplus

2017-18 Total General Fund Expenditures per the CAFR, Ex. C-1

Increased by: Transfer from Capital Outlay to Capital Projects Fund Transfer from Capital Reserve to Capital Projects Fund Transfer from General Fund to SRF for PerK-Regular Transfer from General Fund to SRF for PerK-lnclusion

Decreased by: On-BehalfTPAF Pension & Social Security Assets Acquired Under Capital Leases

Adjusted 2017-18 General Fund Expenditures [(B)+(B1s)-(B2s)]

2% of Adjusted 2017-18 General Fund Expenditures [(B3) times .02]

Enter Greater of (B4) or $250,000 Increased by: Allowable Adjustment*

Maximum Unassigned/Undesignated-Unreserved Fund Balance [(B5)+(K)]

SECTION 2

Total General Fund - Fund Balances@ 6-30-2018 (Per CAFR Budgetary Comparison Schedule-C 1) Decreased by:

Year-end Encumbrances Legally Restricted - Designated for Subsequent Year's

Expenditures Legally Restricted - Excess Surplus - Designated for

Subsequent Year's Expenditures** Other Restricted Fund Balances **** Assigned Fund Balance - Unreserved - Designated for

Subsequent Year's Expenditures Additional Assigned Fund Balance - Unreserved -

Designated for subsequent Year's Expenditures July 1, 2018 -August 1, 2018

Total Unassigned Fund Balance [(C)-(C1 )-(C2)-(C3)-(C4)-(C5)-(C6)]

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$ 33, 193,294.86

$ $ $ $

$ 4,163,426.94 $

$ 29,029,867.92

$ 580,597.36 $ 580,597.36 $ 401,180.00

$ 3,863,321.77

$

$

$ 240,462.57 $ 341,129.84

$ 1,309,537.43

$

(B)

(B1a) (B1b) (B1c) (B1d)

(B2a) (B2b)

(B3)

(B4) (B5) (K)

$ 981,777.36 (M)

(C)

(C1)

(C2)

(C3) (C4)

(C5)

(C6) *****

$ 1,972,191.93 (U1)



(UNAUDITED)

SECTION3

Restricted Fund Balance - Excess Surplus***[(U1)-(M)] IF NEGATIVE ENTER -0- $ 990,414.57 (E)

Recapitulation of Excess Surplus as of June 30, 2018

Reserved Excess Surplus - Designated for Subsequent Year's Expenditures** Reserved Excess Surplus***[(E)]

$ 240,462.57 (C3) $ 990,414.57 (E)

Total Excess Surplus [(C3) + (E)] $ 1,230,877.14 (D)

Footnotes:

*Allowable adjustment to expenditures on line K must be detailed as follows. This adjustment line (as detailed below) is to be utilized when applicable for:

(H) Federal Impact Aid. The passage of P.L. 2015, c.46 amended N.J.S.A. 18A:7F-41 to permit a board of education to appropriate federal impact aid funds to establish or supplement a federal impact aid legal reserve in the general fund. Accordingly, effective for the year ending June 30, 2016 the Federal Impact Aid adjustment to expenditures is limited to the portion of Federal Impact Aid Section 8002 and Section 8003 received during the fiscal year and recognized as revenue on the General Fund Budgetary Comparison Schedule, but not transferred to the Federal Impact Aid Reserve -General (8002 or 8003) by board resolution during June 1 to June 30 of the fiscal year under audit. Amounts transferred to the reserve are captured on line (C4);

(I) Sale and Lease-back (Refer to the Audit Program Section II, Chapter 1 O); (J1) Extraordinary Aid; (J2) Additional Nonpublic School Transportation Aid; (J3) Recognized current year School Bus Advertising Revenue; and (J4) Family Crisis Transportation Aid.

Notes to auditor: Refer to the Audit Program Section II, Chapter 10 for restrictions on the inclusion of Extraordinary Aid, Family Crisis Transportation Aid, and Additional Nonpublic School Transportation Aid.

**

***

****

*****

Detail of Allowable Adjustments

Impact Aid Sale & Lease-back Extraordinary Aid Additional Nonpublic School Transportation Aid Current Year School Bus Advertising Revenue Recognized Family Crisis Transportation Aid Total Adjustments [(H)+{l)+(J1)+(J2)+(J3)+(J4)]

$ $ $ $ $ $ $

(H) (I)

373,183.00 (J1) 27,997.00 (J2)

(J3) (J4)

401,180.00 (K)

This amount represents the June 30, 2018 Excess Surplus (C3 above) and must be included in the Audit Summary Line 90031.

Amount must agree to the June 30, 2018 CAFR and must agree to Audit Summary Line 90030.

Amount for Other Restricted Fund Balances must be detailed for each source. Use in the excess surplus calculation of any legal reserve that is not state mandated or that is not legally imposed by an other type of government, such as the judicial branch of government, must have departmental approval. District requests should be submitted to the Division of Administration and Finance prior to September 30.

Increase in Assigned Fund Balance - Unreserved - Designated for Subsequent Year's expenditures July 1, 2018 to August 1, 2018 resulting from decrease in state aid after adoptiion of 2018-19 district budget. Refer to Commissioner's Broadcast and to page 1-4.2 of this Audit Program.

- 17 -



(UNAUDITED)

Detail of Other Restricted Fund Balance

Statutory restrictions: Approved unspent separate proposal Sale/lease-back reserve Capital reserve Maintenance reserve Emergency reserve Tuition reserve School Bus Advertising 50% Fuel Offset Reserve - current year School Bus Advertising 50% Fuel Offset Reserve - prior year Impact Aid General Fund Reserve (Sections 8002 and 8003) Impact Aid General Fund Reserve (Sections 8007 and 8008) Other state/government mandated reserve [Other Reserved Fund Balance not noted above]****

Total Other Restricted Fund Balance

GERARD ST

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$ _____ _ $ _____ _

$ __ 2_6~1,_12_9_.8_4_ $ ___ 8_0'-.0_00_.o_o_ $ $------

$ $------

$ _____ _

$ $------

$ _____ _

$ 341,129.84 (C4)

Date: February 11, 2019

BOROUGH OF SOUTH RIVER SCHOOL DISTRICT COUNTY OF MIDDLESEX, NEW JERSEY

NET CASH RESOURCE SCHEDULE

Net Cash Resources Did Not Exceed Three Months of Expenditures Proprietary Funds • Food Service

FYE 2018

Net Cash Resources:

CAFR * Current Assets B-4 Cash & Cash Equiv. B-4 Due from Other Gov'ts B-4 Accounts Receivable B-4 Investments

CAFR Current Liabilities B-4 Less Accounts Payable B-4 Less Accruals B-4 Less Due to Other Funds B-4 Less Deferred Revenue

Net Cash Resources

Net Adj. Total Operating Expense:

B-5 Total Operating Expense B-5 Less Depreciation

Adj. Total Operating Expense

Average Monthly Operating Expense:

B / 10

Three Times Monthly Average:

TOTAL IN BOX A

LESS TOTAL IN BOX D NET

From above:

3XC

$ $ $

171,929

303,734 (131,805)

Food Service B -4/5

$ 109,994 132,787

540

71,392

$ 171,929

1,029,296 16,850

$ 1,012,446

$ 101,245

$ 303,734

A is greater than D, cash exceeds 3 X average monthly operating expenses. D is greater than A, cash does not exceed 3 X average monthly operating expenses.

* Inventories are not to be included in total current assets.

SOURCE - USDA resource management comprehensive review form

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(A)

{B)

(C)

(D)


AUDIT RE COM MEN DA TIONS SUMMARY For the Fiscal Year Ended June 30, 2018

Recommendations:

1. Administrative Practices and Procedures

None

2. Financial Planning, Accounting and Reporting

None.

3. School Purchasing Programs

None

4. School Food Service

None

5. Student Body Activities

None

6. Application for State School Aid

None

7. Pupil Transportation

None

8. Facilities and Capital Assets

None

9. Miscellaneous

None

10. Status of Prior Year Audit Findings/Recommendations

There were no prior year audit findings/recommendations.

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